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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported): February 22, 2024
 
GRANITE CONSTRUCTION INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
 
Delaware
(State or Other Jurisdiction
of Incorporation)
1-12911
(Commission
File Number)
77-0239383
(IRS Employer
Identification No.)

 
585 West Beach Street
Watsonville, California 95076
(Address of Principal Executive Offices) (Zip Code)
 
Registrant’s telephone number, including area code: (831) 724-1011
 

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
 
☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueGVANew York Stock Exchange
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 




Item 2.02.    Results of Operations and Financial Condition.
On February 22, 2024, Granite Construction Incorporated (the “Company”) issued a press release with respect to its earnings for the three and twelve months ended December 31, 2023, a copy of which is attached as Exhibit 99.1 and incorporated herein by reference.
The information set forth herein, including the exhibit is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall the information, including the exhibit, be deemed incorporated by reference in any filing of the Company, except as shall be expressly set forth by specific reference in such filing.
Item 9.01.    Financial Statements and Exhibits.
(d)Exhibits. The following exhibits are attached hereto and furnished herewith:
Exhibit NumberDescription
99.1
104Cover Page Interactive Data File (formatted as Inline XBRL)



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
GRANITE CONSTRUCTION INCORPORATED
By:/s/ Elizabeth L. Curtis
Elizabeth L. Curtis
Executive Vice President and Chief Financial Officer
Date: February 22, 2024


Exhibit 99.1
Granite Reports Fourth Quarter and FY 2023 Results
•Q4 revenue increased 18% year-over-year to $934 million
•Q4 diluted EPS of $0.55 and adjusted diluted EPS (1) of $0.82
•Operating cash flow increased $150 million sequentially
•Committed and Awarded Projects ("CAP") (2) of $5.5 billion, a year-over-year increase of $1.1 billion
•2024 guidance continues to align with previously provided targets
WATSONVILLE, Calif. - Granite Construction Incorporated (NYSE: GVA) today announced results for the quarter and year ended December 31, 2023.
Fourth Quarter 2023 Results
Net income totaled $26 million, or $0.55 per diluted share, compared to net income of $22 million, or $0.46 per diluted share, for the same period in the prior year. Adjusted net income (1) totaled $36 million, or $0.82 per diluted share, compared to adjusted net income (1) of $25 million, or $0.56 per diluted share, for the same period in the prior year.
•Revenue increased $145 million to $934 million compared to $789 million for the same period in the prior year. Both Construction and Materials segments posted year-over-year increases with the California and Mountain Groups up 44% and 14%, respectively, offset by a decrease in revenue of 9% in the Central Group.
•Gross profit decreased $3 million to $94 million compared to $97 million for the same period in the prior year. 
•Selling, general, and administrative (“SG&A”) expenses were $82 million, or 8.8% of revenue, compared to $81 million, or 10.2% of revenue, for the same period in the prior year.
•Adjusted EBITDA (1) totaled $74 million, compared to $50 million for the same period in the prior year.
"Across the Company, our teams had an outstanding fourth quarter,” said Kyle Larkin, Granite President and Chief Executive Officer. “The quarter’s strong results, however, were tempered by impacts from the legacy Tappan Zee and I-64 projects. Looking back on 2023, it was a transformative year for Granite as we delivered on our strategic plan. We met our expectations for organic revenue growth and achieved our adjusted EBITDA margin range. We continued to develop our home markets while growing what we believe is the highest quality CAP in Granite’s history by $1 billion year-over-year. We generated operating cash flow in excess of our target at 5.2% of revenue and completed acquisitions that added exclusive rights to 140 million tons of reserves and expanded our vertically integrated footprint to the Southeast. We continue to make significant progress to deliver strong, predictable profitability by focusing on our core construction skills that we have developed and honed over the past 100 years.”
“Our guidance in 2024 reflects significant revenue growth driven by the high level of our CAP, robust construction and materials markets, and contribution from the Lehman-Roberts Company and Memphis Stone & Gravel Company acquisition. Our 2024 adjusted EBITDA margin guidance range remains unchanged, and we expect to see further improvements in operating cash flow.”
Fiscal Year 2023 Results
Net income totaled $44 million, or $0.97 per diluted share, compared to net income of $83 million, or $1.70 per diluted share, in the prior year. Adjusted net income (1) totaled $140 million, or $3.14 per diluted share, compared to adjusted net income (1) of $104 million, or $2.31 per diluted share, in the prior year.
•    Revenue increased $208 million to $3.5 billion compared to $3.3 billion in the prior year.
•    Gross profit increased $27 million to $396 million compared to $369 million in the prior year.
•SG&A expenses totaled $294 million, or 8.4% of revenue, compared to $273 million, or 8.3% of revenue, in the prior year. The increase was primarily driven by higher incentive compensation and non-qualified deferred compensation expenses in 2023.
•Adjusted EBITDA (1) totaled $269 million compared to $210 million for the same period in the prior year.
(1)Adjusted net income, adjusted diluted earnings per share, earnings before interest, taxes, depreciation, and amortization (“EBITDA”), EBITDA margin, adjusted EBITDA, and adjusted EBITDA margin are non-GAAP measures. Please refer to the description and reconciliation of non-GAAP measures in the attached tables.
(2)CAP is comprised of revenue we expect to record in the future on executed contracts, including 100% of our consolidated joint venture contracts and our proportionate share of unconsolidated joint venture contracts, as well as the general construction portion of construction manager/general contractor, construction manager/at risk and progressive design build contracts to the extent contract execution and funding is probable.


Fourth Quarter and Fiscal Year 2023 Segment Results (Unaudited - dollars in thousands)
Construction Segment
Three Months Ended December 31,Years Ended December 31,
20232022Change20232022Change
Revenue$793,727 $665,077 $128,650 19.3 %$2,992,254 $2,803,935 $188,319 6.7 %
Gross profit$72,034 $72,133 $(99)(0.1)%$325,055 $303,881 $21,174 7.0 %
Gross profit as a percent of revenue9.1 %10.8 %10.9 %10.8 %
Committed and Awarded ProjectsDecember 31, 2023September 30, 2023Change - Quarter over QuarterDecember 31, 2022Change - Year over Year
California$2,436,521 $2,345,294 $91,227 3.9 %$1,747,163 $689,358 39.5 %
Central1,707,862 1,811,426 (103,564)(5.7)%1,661,613 46,249 2.8 %
Mountain1,401,371 1,427,803 (26,432)(1.9)%1,076,363 325,008 30.2 %
Total$5,545,754 $5,584,523 $(38,769)(0.7)%$4,485,139 $1,060,615 23.6 %
Construction revenue in the fourth quarter increased 19% year-over-year led by the California and Mountain groups with increases of 61% and 12%, respectively, more than offsetting a reduction in revenue in the Central group of 13% driven by a reduction in the estimated probable claim recovery from the legacy Tappan Zee project. Significantly higher levels of CAP for both the California and Mountain groups allowed our teams to increase revenue during the quarter. The performance in the quarter, combined with the strong third quarter, overcame the weather-related slow start to the year and resulted in a revenue increase of 7% year-over-year for the fiscal year ended December 31, 2023.
While construction gross profit increased year-over-year for the fiscal year, gross profit margin in the fourth quarter decreased year-over-year primarily due to negative impacts from the legacy Tappan Zee and I-64 High Rise Bridge Projects. Although a non-cash event, we adjusted our probable claim recovery estimate on the Tappan Zee project to reflect developments in the dispute review process. This resulted in a negative impact to gross profit of $19 million during the fourth quarter. Even though construction activities are now substantially complete on the I-64 High Rise Bridge project, fourth quarter gross profit was negatively impacted by $14 million, or $7 million after non-controlling interest. For the year, the I-64 project’s negative impact to gross profit was $55 million, or $27 million after non-controlling interest. Excluding the impact of these two projects, construction gross profit margin was 13% in the fourth quarter and for the fiscal year.
CAP decreased $39 million sequentially and increased $1.1 billion year-over-year. Despite a slight decrease in CAP during the fourth quarter, our markets continue to be robust, and we are entering 2024 with significantly higher CAP than we began 2023. Given the current market environment and strong funding levels of state Departments of Transportation, we believe there are substantial opportunities to continue to build CAP in 2024.


Materials Segment
Three Months Ended December 31,Years Ended December 31,
20232022Change20232022Change
Revenue$139,971 $124,136 $15,835 12.8 %$516,884 $497,321 $19,563 3.9 %
Gross profit$22,277 $24,648 $(2,371)(9.6)%$71,344 $65,613 $5,731 8.7 %
Gross profit as a percent of revenue15.9 %19.9 %13.8 %13.2 %
Materials revenue for the fourth quarter and fiscal year ended December 31, 2023 increased compared to the same periods in the prior year, driven primarily by sales from facilities and businesses acquired in 2023 and higher asphalt and aggregate sales prices. Gross profit and gross profit margin decreased during the fourth quarter primarily due to a gross loss from our newly acquired operations, including the impact of purchase accounting, which reduced gross profit margin by 260 bps.
Outlook
Our guidance for 2024 is described below:
•Revenue in the range of $3.8 billion to $4.0 billion
•Adjusted EBITDA margin in the range of 9.0% to 11.0%
•SG&A expense in the range of 7.5% to 8.0% of revenue
•Mid-20s effective tax rate for adjusted net income
•Capital expenditures of approximately $130 million to $150 million
We do not provide a reconciliation of forward-looking adjusted EBITDA margin or the most directly comparable forward-looking GAAP measure of net income attributable to Granite Construction Incorporated because we cannot predict with a reasonable degree of certainty and without unreasonable efforts certain components or excluded items that are inherently uncertain and depend on various factors. For these reasons, we are unable to assess the potential significance of the unavailable information.
“In 2024, we expect to achieve the revenue growth and profitability targets that we announced two years ago,” said Lisa Curtis, Executive Vice President and Chief Financial Officer. “We believe this demonstrates that we are executing on our strategic plan. Entering 2024, with CAP 24% higher year-over-year and a strong market, we expect revenue to grow significantly in 2024 to a range of $3.8 billion to $4.0 billion, inclusive of the recently acquired Lehman-Roberts Company and Memphis Stone & Gravel Company. As we have stated in the past, we expect profitability to increase to an adjusted EBITDA margin of 9.0% to 11.0% in 2024, led by our transformed project portfolio and improved materials margins. CAPEX is expected to be in a range of $130 million to $150 million, including approximately $50 million in planned strategic materials investments in land, reserves and an aggregate plant. This range also includes approximately $20 million related to a project-specific tunnel boring machine.”

Conference Call
Granite will conduct a conference call today, February 22, 2024, at 8:00 a.m. Pacific Time/11:00 a.m. Eastern Time to discuss the results of the quarter and fiscal year ended December 31, 2023. The Company invites investors to listen to a live audio webcast of the investor conference call on its Investor Relations website, https://investor.graniteconstruction.com. The investor conference call will also be available by calling 1-877-328-5503; international callers may dial 1-412-317-5472. An archive of the webcast will be available on Granite's Investor Relations website approximately one hour after the call. A replay will be available after the live call through February 29, 2024, by calling 1-877-344-7529, replay access code 3276603; international callers may dial 1-412-317-0088.
About Granite
Granite is America’s Infrastructure Company™. Incorporated since 1922, Granite (NYSE:GVA) is one of the largest diversified construction and construction materials companies in the United States as well as a full-suite civil construction provider. Granite’s Code of Conduct and strong Core Values guide the Company and its employees to uphold the highest ethical standards. Granite is an industry leader in safety and an award-winning firm in quality and sustainability. For more information, visit graniteconstruction.com, and connect with Granite on LinkedIn, X, Facebook and Instagram.


Forward-looking Statements
Any statements contained in this press release that are not based on historical facts, including statements regarding future events, occurrences, opportunities, circumstances, activities, performance, growth, demand, strategic plans, shareholder value, outcomes, outlook, 2024 fiscal year guidance for revenue, adjusted EBITDA margin, SG&A expense, effective tax rate, and capital expenditures, CAP, results, delivery of strong, predictable profitability, our guidance in 2024 reflects significant revenue growth driven by high levels of CAP, robust construction and materials markets and contributions from acquisitions, our adjusted EBITDA margin guidance remaining unchanged, our expectations to realize further increases in operating cash flow, our belief that there are substantial opportunities to build CAP in 2024, our expectations to achieve the revenue growth and profitability targets we previously announced, we expect revenue to grow significantly in 2024 and we expect profitability to increase in 2024 constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by words such as “future,” “outlook,” “assumes,” “believes,” “expects,” “estimates,” “anticipates,” “intends,” “plans,” “appears,” “may,” “will,” “should,” “could,” “would,” “continue,” "guidance" and the negatives thereof or other comparable terminology or by the context in which they are made. These forward-looking statements are estimates reflecting the best judgment of senior management and reflect our current expectations regarding future events, occurrences, opportunities, circumstances, activities, performance, growth, demand, strategic plans, shareholder value, outcomes, outlook, 2024 fiscal year guidance for revenue, adjusted EBITDA margin, SG&A expense, effective tax rate, and capital expenditures, CAP, results, delivery of strong, predictable profitability, our guidance in 2024 reflects significant revenue growth driven by high levels of CAP, robust construction and materials markets and contributions from acquisitions, our adjusted EBITDA margin guidance remaining unchanged, our expectations to realize further increases in operating cash flow, our belief that there are substantial opportunities to build CAP in 2024, our expectations to achieve the revenue growth and profitability targets we previously announced, we expect revenue to grow significantly in 2024 and we expect profitability to increase in 2024. These expectations may or may not be realized. Some of these expectations may be based on beliefs, assumptions or estimates that may prove to be incorrect. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized or otherwise materially affect our business, financial condition, results of operations, cash flows and liquidity. Such risks and uncertainties include, but are not limited to, those described in greater detail in our filings with the Securities and Exchange Commission, particularly those described in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
Due to the inherent risks and uncertainties associated with our forward-looking statements, the reader is cautioned not to place undue reliance on them. The reader is also cautioned that the forward-looking statements contained herein speak only as of the date of this press release and, except as required by law; we undertake no obligation to revise or update any forward-looking statements for any reason.


GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited - in thousands, except share and per share data)
December 31, 2023December 31, 2022
ASSETS
Current assets
Cash and cash equivalents $417,663 $293,991 
Short-term marketable securities35,863 39,374 
Receivables, net598,705 463,987 
Contract assets262,987 241,916 
Inventories103,898 86,809 
Equity in unconsolidated construction joint ventures171,233 183,808 
Other current assets 53,102 37,411 
Total current assets1,643,451 1,347,296 
Property and equipment, net662,864 509,210 
Long-term marketable securities— 26,569 
Investments in affiliates92,910 80,725 
Goodwill155,004 73,703 
Intangible assets117,322 9,212 
Right of use assets78,176 49,079 
Deferred income taxes, net8,179 22,208 
Other noncurrent assets55,634 49,931 
Total assets$2,813,540 $2,167,933 
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt$39,932 $1,447 
Accounts payable408,363 334,392 
Contract liabilities 243,848 173,286 
Accrued expenses and other current liabilities 337,740 288,469 
Total current liabilities1,029,883 797,594 
Long-term debt614,781 286,934 
Long-term lease liabilities63,548 32,170 
Deferred income taxes, net3,708 1,891 
Other long-term liabilities74,654 64,199 
Commitments and contingencies
Equity
Preferred stock, $0.01 par value, authorized 3,000,000 shares, none outstanding
— — 
Common stock, $0.01 par value, authorized 150,000,000 shares; issued and outstanding: 43,944,118 shares as of December 31, 2023 and 43,743,907 shares as of December 31, 2022
439 437 
Additional paid-in capital474,134 470,407 
Accumulated other comprehensive income881 788 
Retained earnings501,844 481,384 
Total Granite Construction Incorporated shareholders’ equity977,298 953,016 
Non-controlling interests49,668 32,129 
Total equity1,026,966 985,145 
Total liabilities and equity$2,813,540 $2,167,933 


GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - in thousands, except per share data)
Three Months Ended
December 31,		Years Ended
December 31,
2023202220232022
Revenue
Construction$793,727 $665,077 $2,992,254 $2,803,935 
Materials139,971 124,136 516,884 497,321 
Total revenue933,698 789,213 3,509,138 3,301,256 
Cost of revenue
Construction721,693 592,944 2,667,199 2,500,054 
Materials117,694 99,488 445,540 431,708 
Total cost of revenue839,387 692,432 3,112,739 2,931,762 
Gross profit94,311 96,781 396,399 369,494 
Selling, general and administrative expenses81,987 80,574 294,466 272,610 
Other costs, net12,244 1,719 50,217 24,120 
Gain on sales of property and equipment, net(20,553)(2,155)(28,346)(12,617)
Operating income20,633 16,643 80,062 85,381 
Other (income) expense
Loss on debt extinguishment— — 51,052 — 
Interest income(6,251)(3,282)(17,538)(6,528)
Interest expense6,563 2,621 18,462 12,624 
Equity in income of affiliates, net(6,370)(3,915)(25,748)(13,571)
Other (income) expense, net(3,307)(3,607)(6,020)1,039 
Total other (income) expense, net(9,365)(8,183)20,208 (6,436)
Income before income taxes29,998 24,826 59,854 91,817 
Provision for income taxes8,289 5,650 30,267 12,960 
Net income21,709 19,176 29,587 78,857 
Amount attributable to non-controlling interests4,289 2,876 14,012 4,445 
Net income attributable to Granite Construction Incorporated$25,998 $22,052 $43,599 $83,302 
Net income per share attributable to common shareholders:
Basic$0.59 $0.50 $0.99 $1.87 
Diluted$0.55 $0.46 $0.97 $1.70 
Weighted average shares outstanding:
Basic43,934 43,732 43,87944,485
Diluted53,605 51,475 52,56552,326



GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
Years Ended December 31,20232022
Operating activities
Net income$29,587 $78,857 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization92,270 82,569 
Amortization related to long-term debt2,390 2,366 
Non-cash loss on debt extinguishment51,052 — 
Gain on sales of property and equipment, net(28,346)(12,617)
Deferred income taxes26,556 5,447 
Stock-based compensation10,477 7,765 
Equity in net loss from unconsolidated construction joint ventures18,617 19,676 
Net income from affiliates(25,748)(13,571)
Other non-cash adjustments5,695 222 
Changes in assets and liabilities1,157 (115,067)
Net cash provided by operating activities$183,707 $55,647 
Investing activities
Purchases of marketable securities(9,740)(94,104)
Maturities of marketable securities40,000 45,000 
Proceeds from called marketable securities— 6 
Purchases of property and equipment(140,384)(121,612)
Proceeds from sales of property and equipment38,109 26,064 
Proceeds from company-owned life insurance1,545 — 
Proceeds from the sale of business— 140,576 
Acquisition of businesses, net of cash acquired(294,018)— 
Issuance of notes receivable— (7,560)
Collection of notes receivable5,198 630 
Net cash used in investing activities$(359,290)$(11,000)
Financing activities
Proceeds from debt305,000 50,000 
Debt principal repayments(305,118)(125,164)
Capped call transactions(53,035)— 
Redemption of warrants(13,201)— 
Proceeds from issuance of 3.75% Convertible Notes373,750 — 
Debt issuance costs(10,865)— 
Cash dividends paid(22,811)(23,271)
Repurchases of common stock(4,124)(70,898)
Contributions from non-controlling partners43,300 13,150 
Distributions to non-controlling partners(14,224)(8,567)
Other financing activities, net583 439 
Net cash provided by (used in) financing activities$299,255 $(164,311)
Net increase (decrease) in cash, cash equivalents and restricted cash$123,672 $(119,664)
Cash, cash equivalents and $0 and $1,512 in restricted cash at beginning of period293,991 413,655 
Cash, cash equivalents and $0 in restricted cash at end of period$417,663 $293,991 


Non-GAAP Financial Information
The tables below contain financial information calculated other than in accordance with U.S. generally accepted accounting principles (“GAAP”). Specifically, management believes that non-GAAP financial measures such as EBITDA and EBITDA margin are useful in evaluating operating performance and are regularly used by securities analysts, institutional investors and other interested parties, and that such supplemental measures facilitate comparisons between companies that have different capital and financing structures and/or tax rates. We are also providing adjusted EBITDA and adjusted EBITDA margin, non-GAAP measures, to indicate the impact of loss on debt extinguishment in 2023 and other costs, net, which include investigation-related legal fees, strategic acquisition costs, a litigation charge and costs and non-cash impairment charges related to the wind down of our international mineral services operations in 2023, and investigation-related legal fees, settlement charges, divestiture costs and a gain on sale of a business in 2022.
We provide adjusted income before income taxes, adjusted provision for income taxes, adjusted net income attributable to Granite Construction Incorporated, adjusted diluted weighted average shares of common stock and adjusted diluted earnings per share attributable to common shareholders, non-GAAP measures, to indicate the impact of the following:
•Other costs, net as described above;
•Transaction costs which include acquired intangible amortization expense and acquisition-related depreciation in 2023 and 2022;
•Loss on debt extinguishment in 2023, and
•Income taxes related to the disposal of Inliner goodwill and tax basis difference on held for sale entities in 2022 and establishment of valuation allowance in 2023.
Management believes that these additional non-GAAP financial measures facilitate comparisons between industry peer companies, and management uses these non-GAAP financial measures in evaluating the Company's performance. However, the reader is cautioned that any non-GAAP financial measures provided by the Company are provided in addition to, and not as alternatives for, the Company's reported results prepared in accordance with GAAP. Items that may have a significant impact on the Company's financial position, results of operations and cash flows must be considered when assessing the Company's actual financial condition and performance regardless of whether these items are included in non-GAAP financial measures. The methods used by the Company to calculate its non-GAAP financial measures may differ significantly from methods used by other companies to compute similar measures. As a result, any non-GAAP financial measures provided by the Company may not be comparable to similar measures provided by other companies. 


GRANITE CONSTRUCTION INCORPORATED
EBITDA AND ADJUSTED EBITDA(1)
(Unaudited - dollars in thousands)
Three months ended December 31,Years ended December 31,
2023202220232022
EBITDA:
Net income attributable to Granite Construction Incorporated$25,998 $22,052 $43,599 $83,302 
Net income margin (2)2.8 %2.8 %1.2 %2.5 %
Depreciation, depletion and amortization expense (3)27,144 21,181 92,866 83,618 
Provision for income taxes8,289 5,650 30,267 12,960 
Interest (income) expense, net312 (661)924 6,096 
EBITDA(1)$61,743 $48,222 $167,656 $185,976 
EBITDA margin(1)(2)6.6 %6.1 %4.8 %5.6 %
ADJUSTED EBITDA:
Other costs, net$12,244 $1,719 $50,217 $24,120 
Loss on debt extinguishment— — 51,052 — 
Adjusted EBITDA(1)$73,987 $49,941 $268,925 $210,096 
Adjusted EBITDA margin(1)(2)7.9 %6.3 %7.7 %6.4 %
(1)We define EBITDA as GAAP net income attributable to Granite Construction Incorporated, adjusted for net interest (income) expense, taxes, depreciation, depletion and amortization. Adjusted EBITDA and adjusted EBITDA margin exclude the impact of Other costs, net, and loss on debt extinguishment, as described above.
(2)Represents net income, EBITDA and adjusted EBITDA divided by consolidated revenue of $934 million and $789 million, for the three months ended December 31, 2023 and 2022, respectively, and $3.5 billion and $3.3 billion for the fiscal year ended December 31, 2023 and 2022, respectively. 
(3)Amount includes the sum of depreciation, depletion and amortization which are classified as cost of revenue and selling, general and administrative expenses in the consolidated statements of operations.


GRANITE CONSTRUCTION INCORPORATED 
ADJUSTED NET INCOME RECONCILIATION
(Unaudited - in thousands, except per share data)
Three Months Ended
December 31,		Years Ended
December 31,
2023202220232022
Income before income taxes$29,998 $24,826 $59,854 $91,817 
Other costs, net12,244 1,719 50,217 24,120 
Transaction costs1,660 1,736 6,706 9,680 
Loss on debt extinguishment — — 51,052 — 
Adjusted income before income taxes$43,902 $28,281 $167,829 $125,617 
Provision for income taxes$8,289 $5,650 $30,267 $12,960 
Tax effect of goodwill disposal related to sale of business— — — (10,070)
Tax basis difference on held for sale entities— — — 17,691 
Tax expense to establish valuation allowance— — (1,542)— 
Tax effect of adjusting items (1)3,615 899 13,491 5,668 
Adjusted provision for income taxes$11,904 $6,549 $42,216 $26,249 
Net income attributable to Granite Construction Incorporated$25,998 $22,052 $43,599 $83,302 
After-tax adjusting items10,289 2,556 96,026 20,511 
Adjusted net income attributable to Granite Construction Incorporated $36,287 $24,608 $139,625 $103,813 
Diluted weighted average shares of common stock (2)53,605 51,475 52,565 52,326 
Less: dilutive effect of Convertible Notes (3)(9,099)(7,309)(8,103)(7,309)
Adjusted diluted weighted average shares of common stock44,506 44,166 44,462 45,018 
Diluted net income per share attributable to common shareholders$0.55 $0.46 $0.97 $1.70 
After-tax adjusting items per share attributable to common shareholders0.27 0.10 2.17 0.61 
Adjusted diluted earnings per share attributable to common shareholders$0.82 $0.56 $3.14 $2.31 
(1)The tax effect of adjusting items was calculated using our estimated annual statutory tax rate. The tax effect of adjusting items for the fiscal year ended December 31, 2023 excludes the $51 million loss on debt extinguishment and $5 million non-cash impairment charges included in “Other costs, net” which are not tax deductible. The tax effect of adjusting items for the fiscal year ended December 31, 2022 excludes a $12 million charge related to the resolution of the SEC investigation which is not tax deductible.
(2)Diluted weighted average shares of common stock includes the dilutive effect on net income per share attributable to Granite Construction Incorporated of the 2.75% Convertible Notes and the 3.75% Convertible Notes potentially converting into 9,099,009 shares of common stock for the fourth quarter ended December 31, 2023 and 7,308,848 shares of common stock for the fourth quarter and fiscal year ended December 31, 2022. For the fiscal year ended December 31, 2023, the potential dilutive effect of 995,847 shares related to the 2.75% Convertible Notes is not included as their inclusion would be antidilutive resulting in 8,103,162 potentially converting into shares of common stock.
(3)When calculating diluted net income attributable to common shareholders, GAAP requires that we include potential share dilution from the 2.75% Convertible Notes and the 3.75% Convertible Notes when not antidilutive. For the purposes of calculating adjusted diluted net income per share attributable to common shareholders, the dilutive effect from the 2.75% Convertible Notes and 3.75% Convertible Notes is removed to reflect the impact of the purchased equity derivative instruments which offset any potential share dilution above the $31.47 conversion price up to a share price of $53.44 for the 2.75% Convertible Notes and above the $46.12 conversion price up to a share price of $79.83 for the 3.75% Convertible Notes. The average share price did not exceed $53.44 in any period.


Contacts:
Investors
Wenjun Xu, 831-761-7861
Or
Media
Erin Kuhlman, 831-768-4111
Source: Granite Construction Incorporated

v3.24.0.1
Cover
Feb. 22, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 22, 2024
Entity Registrant Name GRANITE CONSTRUCTION INCORPORATED
Entity Incorporation, State or Country Code DE
Entity File Number 1-12911
Entity Tax Identification Number 77-0239383
Entity Address, Address Line One 585 West Beach Street
Entity Address, City or Town Watsonville
Entity Address, State or Province CA
Entity Address, Postal Zip Code 95076
City Area Code 831
Local Phone Number 724-1011
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.01 par value
Trading Symbol GVA
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0000861459
Amendment Flag false
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